Optimal Time to Rent in Canada as Prices Hit 31-Month Low: Report

The Canadian rental market is currently experiencing a significant downturn in prices. According to a recent report from Rentals.ca and Urbanation, average rents have reached a 31-month low as of January. This decline provides a favorable opportunity for renters, with average asking rents dropping 2% year-over-year to $2,057.

Current Rental Trends in Canada

This decline marks the 16th consecutive month of decreasing rents. Over the past two years, rental prices have plummeted by 6.3%. Giacomo Ladas, the Associate Communications Director at Rentals.ca, notes that the shift is returning benefits to renters.

Rental Size and Price Decreases

• The average size of rental listings has decreased: 857 square feet in January, down from 943 square feet two years ago.
• Purpose-built rentals saw a 1% decline, averaging $2,049.
• Condo apartments dropped 5.7%, with an average rent of $2,093.

Ladas mentioned that many smaller units are previously unsold condos now entering the rental market. “They were shoebox condos that nobody wanted to buy,” he explained.

Market Variations by Unit Size

One-bedroom units saw a 3.4% decline in average rent, now at $1,792. Meanwhile, three-bedroom apartments experienced a slight increase of 1.1%, bringing the average to $2,506. This trend indicates a demand for larger living spaces as Canadians opt for rentals over purchasing homes.

Rent Price Drops in Major Cities

Several major Canadian cities reported substantial rent decreases. Notable changes include:

• Toronto: Rent decreased by 4.6%, averaging $2,495.
• Vancouver: A sharper drop of 9.2%, now at $2,630.
• Montreal: Average rent fell 3.7% to $1,913.
• Edmonton: A decline of 2.6%, averaging $1,488.

These figures reflect broader trends across provinces, with Ontario down by 3.3%, Alberta by 4.3%, and British Columbia by 4.7% year-over-year. However, Saskatchewan and Manitoba saw increases of 4.6% and 2.6%, respectively.

Future Outlook for Rental Prices

Ladas predicts that while there may be fluctuations in certain areas, overall rental prices are likely to continue declining. This trend is influenced by both low demand and the influx of new rental units. He pointed to ongoing construction projects that will increase available stock in the market.

As the rental landscape evolves, renters will continue to find opportunities for affordable housing across Canada. With new construction and shifting demographics, the market may undergo significant changes in the months ahead.